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a lot of people from outside the country bite estate and they have no idea when they get the $1.5 million per year and they realize how many staff you really need, cleaning ladies, groundskeepers and how much physical repairs cost. i mean, britain is -- >> just heating these places alone, right? >> exactly, so a lot of people end up walking away fairly shortly after buying them, but the surprising thing is there aren't that many on the market right now. >> when you're flipping through your addition of "town "town & country," a renovator's dream, don't buy it. >> don't buy it. >> thank you so much for that. very quickly, let's take a look at what the markets are up to. haven't really moved all that much. of course, we got the payroll number today which is pretty much in line. the unemployment rate holding pretty sticky at the top so we're sitting there for the dow marginally to the upside with the s&p and nasdaq and it has, right at the top of the show, been a good week overall. thanks for watching "street signs."
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don't get the flu. keep safe. >> 48 hours until "downton abbey." i'm michelle caruso-cabrera. maria bartiromo will be back monday. >> no idea how excited she is to be watching "downton abbey." my third co-anchor of the week. stocks trying to end the week on a positive note despite a mixed december jobs report. right now the dow is up 33 points. that's about the high for the session. in fact, we're moving higher from here. 13,422 and change right now. nasdaq's had an even better week. it's up four points right now at 3104, and the s&p 500 index is up five-plus points at 1468. so slight gains right now, but we are still up big for the week from that big huge rally on
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wednesday. so how do you play this market going into next week? let's find out from today's closing bell exchange, our friend ralph acamp rah and stephanie link from the street, joe greco on the floor here from meridian equity partners and our own rick santelli with us from chicago. >> ralph, last time you were with us you were wildly bullish. >> yes. >> the biggest one-day point gain to begin the new year. >> just the beginning. >> you think it's just a beginning? >> did you hear the hissing sound when the yield on the ten-year treasury went above 1.9? the hissing, the air is coming out of that balloon, bill. >> you're saying the treasury bubble is bursting. >> starting to burst. >> and the transportation index is this close today to making an all-time new high. how can i be bearish? >> for the novice viewer, when the transportation index is hitting new highs, it's got to be confirmed by the industrials. that's a really bullish sign. >> that's a dow fear, the oldest theory in technical analysis.
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>> rick santelli, we are approaching 2%, well, approaching. we're closer than we've been in the last few weeks here, but do you think we'll hit that? haven't been there in a while? >> i think it's possible. i find it fascinating that we seem to have 20 basis point ranges for long periods of time. in the beginning of the year it was 18-210. for much of the last four months it's been 160-180, and then, boom, we've shot through, so i think it's pretty safe to say 180 to 2% may be the trading range we'll have to get used to, but, remember, when you have a full cup of coffee, when you reach the tipping point, it's hard to tell. i think it's been more of a splash than a real tip. >> how but, stephanie link, like ralf, backing up the truck here on stocks, or is that nosebleed level in the ten-year yield frightening you? >> i'm pretty encouraged. i think that the fact that we got through the first part. fiscal cliff issues, that's a good thing. we have to get through now the debt ceiling, so i don't think
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it's clear sailing by any means. i think you're going to see volatility, but look at the economic data here. i mean, the non-farm payroll numbers here were in line, but they are encouraging on the private sector job growth, encouraging on our hourly earnings, and i think even the ism services was quite encouraging, so the u.s. is actually on better footing, and i think we can handle all the tax implications and the spending cuts a little bit better, about trend line 2% gdp growth, nothing great, but certainly not like the recessionary fears of where we were a year ago, and then globally you've got china recovering in some of the other markets like brazil and india doing a little bit better. >> so it's all progress. we're not there yet. >> progress, yes. >> joe greco, spoke to you guys on the floor, and there's a group highly skeptical of this rally. they are not happy at all with what came out of washington, and there are plenty of you guys who are very positive like ralph. where do you stand right now? >> you know, i tend to
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vacillate. i'll give a salute to mr mr. acampora whose class i sat in years ago. >> haven't we all. >> at this point look to many of the places that were already referenced and see that there's a lot of opportunities still out there. i'd like to drill down a little bit deeper, no pun intended but home builders, xhb and look at the constituent members. it's a place that's just been marching forward. as you get that data that comes out with the housing starts and permits and what not, you're going to see that that's going to be the leg that really is going to push us through this year and real heal us when it comes to employment, and then we go to the next step which is energy, yesterday in particular, great news for rig, made a setment with the doj, looking at bp and anadarko and halliburton, and it may, may be very smooth sailing for them, up another 10%, 15% by mid-year if they can make nice settlements. >> you're a very famous technician. a lot of people follow you. tell us how you look through the
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debt ceiling fate that we know is coming. the last debt ceiling debate was horrific and had a major effect on the economy. >> lots of volatility. i don't know if it's another cliff. i mean, a milk cliff and cheese cliff and everybody is worried about it. can i tell you something? i've been doing this for close to 50 years. i've never seen so many people so negative for so long. guys, put on your bullish hat. this thing is going to sail. >> and that is -- we should point out. that's a contrarian way to think, right? when everybody is so bearish that's the precise moment you should be bullish. >> we're talking mega bearish. airline at 52-week highs, housing at 52-week highs, autos. a lot of groups have already done very well >> what about the financials, they are coming on. hello. i've got to ring a bell for you. >> there's room for more. >> absolutely. i was on the floor a couple of weeks ago, and i said to someone i really like bank of america.
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a young fellow came up and said, gee, i took your class. got a target at 11.5. i grabbed him and said what chart are you looking at, boy? you're looking at the world through a microscope. step back and take a look at that stock on a weekly basis. that's a double, triple, maybe a quadruple if you're willing to hold it long enough. hello, yes. >> who had the hmm out there? >> triple or quadruple is pretty big. >> $20, $30, yes, sir. >> that's big. next wednesday is a big catalyst day for bank of america. >> i didn't say tomorrow. >> next wednesday is a catalyst day. keep an eye on that. >> stephanie, you going to rush out and buy more stuff right now? >> next week is really important because you get alcoa on tuesday, and more than just their earnings, a great job is done by giving all data points on their markets, aerospace, auto, packaging, truck, and data points in some of the subsectors like truck and starting to
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trough, so i think you want to start to get into these industrials. we've been buying them for the last couple of months actually, and even in the defensive side because you want a balanced portfolio. defensive side, find some names with emerging markets exposure so something like an abbott labs with 40% of exposure overseas or something like procter & gamble which is growing overseas so i think there are a lot of places you can put your money on the cyclic call side as well as on the defensives. >> rick, speaking of financials, cme stock doing pretty well today. any idea why? >> well, you know, when i look at what drives the ferrari of futures down on this floor, i see your dollar futures, interest rate futures. well, that ferrari has had a police escort to go 20 miles per hour called the federal reserve, and i think some of the issues in the minute and the idea that there could possibly be actually a rise in interest rates, well, that's just lighting on fire the potential to do a whole lot more contracts. >> okay. good explanation. >> thank you, folks.
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good to see you. ralph, i'll see you are later this hour. we'll have you on the countdown and we'll get mr. acampora's take on how this market closes. headed towards the close with 52 minutes left. neither highs. no gangbusters rally, but we're holding on to the gains from wednesday, up 32 points on the dow right now. >> erskine bowles of the same bowles/simpson debate or solution that never got put into place, co-chair of the president's debt commission, less than impressed with the tax deal that averted the fiscal cliff. he's going to join us next. >> then, it's a bad day for lulu lemon shares, spent the day flying high but taking a big hit after a downgrade. can the company get its juice back, or is it now just a lemon? >> after the bell, actor patrick dempsey takes on starbucks and wins. find out how dr. mcdreamy is trying to boost the seattle economy. >> how tall was he? >> tall enough. [ male announcer ] how can power consumption in china,
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. a missed opportunity. that's what the debt co-funders
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erskine bowles and alan simpson are calling the deal we got from washington on the fiscal cliff. >> erskine bowles has gone on to say it was a chance to do something big, to put our fiscal house in order, and we absolutely blew it. erskine bowles joins us right now with more of your thoughts on all of this. i mean, what were you thinking as these negotiations were getting closer and closer to the deadline and they came up with this tax bill? >> look, bill, i was -- i was hoping, you know, that we wouldn't take this big, you know, hit in the gut and go over this fiscal cliff and really do some real devastation to the economy. >> so you're glad they did something? >> yeah, look it. we got something. we got about $620 billion worth of revenues. unfortunately, it was a missed opportunity. this was a magic moment to do something really big about our long-term fiscal problems. >> can i play a sound bite for you when it comes to spending from arthur brooks, the
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president of aei, who was on "squawk box" this morning and take a listen to what he said. >> sure. it's pretty clear that obama believes that the only problem that we have is be a undertaxing problem in this country. >> for medicare as well? >> everything, everything. there's no indication that he honestly believes that we have a spending and entitlement problem in this country that can't be taken care of through the fiscal consolidation that comes around by taxing people. >> i agree with him, sir. i do not believe that president obama wants to cut spending. do you think he does? >> yeah, i do. i don't think he wants to cut it enough and won't go as far as i want him to go, but, you know, he's laid out $375 billion worth of cuts in things like medicare that are at least a good start. >> but with all due respect, $375 billion in cuts, that's over ten years, right? every month we spend $100 billion more than we bring in.
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$375 billion over ten years when you're spending 100 billion more per month than you should is pitiful. >> michelle, that's why our commission proposed to cut spending by $3 trillion over a ten-year period. i get it, believe me. you know, we've got to have at least that amount of cuts if we're going to put our fiscal house in order. >> what's it going to take for the president to get it, do you think? >> well, i think it's going to take some more pushing on the part of people like me and the business community and just plain folks who are going to one day wake up and force these members of congress and the administration to understand that we've got to face up this problem and we've got to face up to it now. it's our generation that created this mess. we are the ones that have a responsibility to clean it up. >> well, we've got this next deadline coming up in a couple of months, mr. bowles, with the debt ceiling issue. we all know that that's going to be used as a tool or maybe a
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weapon, depending on your point of view, to get some next phase of the deal done. what do you expect to happen at that point? let's talk about that for a little bit. >> look, i think we have three weapons. we have the end of the sequester. we have the continuing resolution that comes to an end, and we have the debt ceiling. i hope to high heaven that these guys don't mess around with the full faith and credit of the u.s. government. using the debt ceiling i think is the wrong place to draw the line in the sand. i think speaker gingrich is right, that if they do draw the line in the sand there, they will end up at the end of the day just folding, you know. let's start negotiating today. >> what other leverage -- >> let's get the fiscal house in order. let's bring people together and actually do something instead of talk about it. >> what other leverage is there unless you -- i mean, there would be no tax deal from the other night if there had not been a fiscal cliff deadline. now we have a debt ceiling
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deadline. what other leverage do you have to bring people to the table with a sense of urgency? >> you have good leverage, the expiration of the sequester in two months. you have the end of a continuing resolution where they could shut the government down. we've got lots of ways to put pressure on the administration and the congress to actually take some responsible action without putting in jeopardy the full faith and credit of our government. >> do you really believe the full faith and credit of the u.s. government is -- i mean, are you suggesting that we could miss a debt payment, because i hear members of the administration use the administration use the phrase default on our obligations. we know perfectly well you can prioritize what you use tax revenue for. you can say the world doesn't have to worry. we'll make every interest payment, just calm down, and we'll figure out the rest. should they make it clear to the world that they will prioritize in that way? >> hey, look. it is absolutely crazy to even
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contemplate having a default on our obligations or on our loans. that's, you know, anybody who is in business would tell you that. what we ought to do is begin to negotiate now to really bring down our spending. we talked about revenue a lot in the last several months, but we haven't talked near enough about, you know, really reducing the cost of our entitlements, slowing the rate of growth of health care to the rate of the growth of the economy, making social security sustainably solvent and really stabilizing the debt so that it's -- we can put it on a downward path that's a percentage of gdp. >> but you know the point of view of the president. he was re-elected on the platform that he had espoused during the campaign which is exactly what he's trying to get through congress right now which does not include as much -- as many spending cuts as the republicans or your commission would like to see at this point. is he misled on that? i mean, the american people did
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return him to the white house? >> i think the president is going to have to move out of his comfort zone and make some cuts beyond those which he would like to do. i think particularly as it relates to the entitlement programs and health care, we're going to have to reduce that cost or it will virtually bankrupt the country. >> how far do the republicans go because it was very clear during this last debate that they were going to be blamed if the country went over the cliff. how far do they stand their ground at the bitter end, and do they -- should they say, you know what, we'll take the sequester if you're not willing to do the cuts in spending that are required. >> michelle, aren't you just sick and tired of this brinksmanship of going from crisis to crisis. >> yes. >> aren't we all. >> why don't we act like grownups and start to negotiate today and see if we can find that common ground. >> you know that. we know that. many. people out there know that, but
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it's not going to happen, let's face it. what leads you to believe that anybody in congress, in this new 113th congress, is going to act any differently than they did in the 112th congress? >> because i know it can be done because i've done it. president clinton set me up to negotiate the blujt agreemealan agreement. nobody believed we could do it. partisanship was at an all-time high because they were impeaching the president. we pulled together rather than apart and put the country first and that's what we've got to do now. >> it fell to vice president biden to negotiate the deal with mitch mcconnell the other night in the senate. are you saying that maybe it's the vice president's job to be the moderator in all of this and find the middle ground that's necessary? >> no, but generally you do have a go-between any time you do a deal. that's why you have the whole
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investment banking profession. good lord, you usually have a go-between to bring the two sides together to push them each to go a little bit further than they would normally and so you can reach a principled compromise. >> sir, the president already came out and said he's not negotiating over the debt ceiling. he's just not going to do that. >> not going to happen. >> so i don't understand where we even begin. doesn't sound like he's coming to the table at all. he already got a tax hike. >> don't forget, we still have this sequester sitting out there. it's coming due. >> that's my question. if the cuts aren't big enough to -- to make the balance sheet of america healthy, should congress or the republicans or whoever is so adamant about spending say, you know what, we're going to take the sequester and that's it. >> especially when you consider that there are those on wall street, who have said, let's go over the cliff. howard dean has said this as well because the resulting recession that might happen is worth a couple of quarters. alan greenspan said the same
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thing, a worth of couple of quarters of recession to get our house in fiscal order again. do you agree? >> look. i never believe that across-the-board cuts are a smart way to bring a budget down. you want to go and cut those things that really need to be cut. if you look at the sequester, the things being cut is the discretionary spending. what we really need to focus on are the entitlements because that's where we have growth far beyond the growth of gdp so i'd much rather see us focus on the entitlements, bring down the cost of health care and make social security sustainably solvent and do something about the discretionary spending. >> can you explain something to me that i don't understand, that we have democrats on repeatedly and i say to them, you know, entitlement spending, i think everybody agrees is the problem. would you means test social security? would you means test medicare? we have billionaires on who get a social security check. i don't see why. means testing for people who are under 50, and repeatedly we have
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democrats who say absolutely not, no way. why? >> sets a bad precedent. they have earned that right. >> look, here's one democrat who will say it's something we've got to do. >> yeah. >> we'll interest to look at things like means testing. we'll have to look at more cost-sharing and look at things like age. we'll have to look at things for paying for quality, not quantity. we'll have to look at things like tort reform. those are things that we've got to put on the table if we're going to be serious about bringing down the cost of health care. >> i know you said the other day that you are ready to leave public service. you want to get back to your grandkids and live a private life again, but i nominate you to be that investment banker to mediate that whole thing. >> here a second. >> i've done that before. someone else's turn. >> mr. bowles, great to see you. thank you for joining us today. >> great to talk to you. >> great to have you on. >> 37 minutes -- how do you feel -- i felt like -- >> he's smartest guy in the room. >> he's so reasonable.
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>> but you know what? there's 535 people in the senate and the house. it's not going to happen. it's not going to happen, unfortunately. i don't think. >> 37 minutes before the bell. the dow jones industrial average right now, as you can see, is higher by 37 points, 13428. the s&p is on pace to close at its highest level in five years. that number is 1465.77. >> we're there now, as a matter of fact. >> lulu lemon has been one of the hottest retail stocks around, but today it's way down while urban outfiters is way up. find out why and which stock is a better fit right now to make your money in 2013. >> also ahead, forget about all the arguing in congress. we're going to hear from somebody who has a very simple solution to saving our economy from the upcoming debt ceiling fight. you'll be shocked to find out what it is. that's later on the "closing bell."
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gold really losing its shine falling for the sixth straight week, a move accelerated where the fed may be easing on the pump sooner than expected. sharon epperson is at the nymex with the details. sharon? >> reporter: quite a day and quite a week for gold prices. we saw gold fall to a low of 1626 an ounce in the session, but it's recovered nicely, up about 30 bucks of the lows of the day, but keep in mind as traders are rebalancing perhaps their positions and looking at other asset classes, we have
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seen a lot of fluctuations in the gold market. there's also no inflation, and so another reason why traders may be looking elsewhere from the gold market. we are going to see rebalancing of the major commodity indices next week, and that is a key factor that could impact gold and silver as well as other commodities. traders are looking at what may perhaps benefit and would be the precious metals. they are also looking at what's going to happen between brent and wti as the goldman sachs commodity index sells the wti contract to buy april rent. that could have significant impact on the oil price in the week ahead. back to you guys. >> all right, sharon, thank you very much. well, call it a tale of two retailers. shares of active wear-maker lulu lemon dropping nearly 5% after a credit suisse downgrade and shares of urban outfitters are up about 2% off an upgrade from the same firm. so, is either a buy right now? let's start talking numbers on these two. on the technical side it's richard ross, global technical
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strategist and on the fundamental side it's steve cortes, founder of veracruz. happy new year. good to see both of you. steve, the fundamental side, what do you think of the retailers? >> i think credit suisse has it wrong. on the lulu lemon side, they have a higher revenue per square foot of their stores than any company in the world except for apple. so this is an incredibly successful retailer that is just getting better, and the second factor they have is they have the right demographic. the wealthy are doing very well. the dow jones luxury index is at a multi-year high right now. this company caters to wealthy folks, primarily wealthy women. i think that urban outfitters, on the other hand, has exactly the wrong demographic. they are into the young hipsters. unfortunately, though, unemployment for people in their 20s right now is 11.5%. >> right. >> so selling knickknacks to hipsters for them to take home and put into their bedrooms
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which by the way are the bedrooms they grew up because many are unemployed or underemployed is a very poor business and that's why this stock, urban outfitters, has had a nice run later and badly underperformed in the last couple of years. >> the charts tell an entirely different story. look, we're in a bull market here. the next leg has begun in earnest. stocks like urban outfiters is where you want to be, and when you pull the chart, you'll see precisely what i mean. for the past three years this stock has been rounding into form. see the beautiful base of support of support. when the context of the base we see the breakout pattern. this stock is off on the right foot, and it won't look back this year. we have a $58 target. now, lulu lemon, exactly the opposite. funny you brought apple into play. great product, but this stock is up 3,300% in just over three years. that's even three times more than chipotle before that stock
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craters. i think you're looking for the same move to the downside. you want to buy breakouts like urban outfitters and sell breakdowns like you're seeing in this stock today. this stock trades $65. >> even i recognize a double top there, steve. >> listen, i'm not arguing, by the way, there's not technical reasons right here for the very near term to be negative on lulu lemon, but i think for an investor looking at a longer term perspective it's outperformed compared to urban outfitters and the market and other retail, i think it will continue to. >> finish your thought there, rich. >> fitness is very fickle. i think going forward you're going to see less yoga, seeing more ultra marathon, cross-fit, strength training, that's what's in style right now. not lulu lemon. its best days are behind it, no pun intended. >> i'm betting on yoga moms and not on hipsters. >> very good. thank you both. happy new year. see you later. >> speaking of yoga. >> michelle. >> every woman in my yoga class.
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>> i'm not a yoga mom or yoga gal but lulu lemon an 80%, 90% hit rate in yoga class. dow jones industrial average is higher right now by about 48 points. we've got about 29 minutes before the "closing bell," and the s&p is higher by 8.07, above the all-time high level, five-year high. we need to stay above 1465.77 to do it. we're right there, right now. with 29 minute to go before the closing bell. goldman sachs accelerating stock grants to top executives hours before this year's higher taxes kicked in. we're going to hear from somebody who says if you wonder why goldman has the corporate reputation of o.j. simpson, his phrase, it's because of stunts like this. plus, how is the tax deal that congress just reached this week impacting wall street? we'll hear from the chairman and ceo of furniture-maker ethan allen. that's next. tdd#: 1-800-345-2550 when i'm trading, i'm totally focused.
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ethan allen making some big moves ahead of the fiscal cliff,
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including issuing a special dividend. now a deal is in place, the ceo says he made the right decision for shareholders and the public. calls the compromise a short-term fix but warns that other challenges remain. >> he joins us now to talk about the headwind. we'll talk about your business in a moment, but your thoughts on what has taken place in congress and your rationale for this special dividend? plenty of other companies did the same thing, but they took some heat for that as well. >> well, i think the short fix is a short fix. it is better not doing anything, but that is not really the long-term solution that we all need. we need stability. we need our government to think long term. we want -- we are an 80-year-old company. we still maintain 70% of the manufacturing in the united states. if i was looking week to week we'd be out of business. we have now about 70 locations in china. we are shipping 60% of the
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product from the united states. >> which is very counter to what other companies do. >> absolutely, yeah. in fact, you have to do counter to others to survive. we have been thinking long term about our people, about our manufacturing, about things that we need to do. now this issue that we're just talking about, we talked about dividends, it was a short-term issue. we paid a relatively, relatively smaller amount. we didn't borrow money. we had the cash, and we said, as some of them, our shareholders, came to me and said why should we not do it? i'm a share herald, too. if you're a shareholder you have a different perspective han if you're not. >> respond to critics who say you greedy, greed people. you wanted to keep more of that money and the country needs you to pay more in taxes. you shouldn't have done that. i don't say that, but you know people are saying that so respond to them. >> you know, we pay the highest taxes, our industry, our business. we don't get any entitlements. we are actually going against
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everything one can think of. we have one of the highest medical costs. we have to conform to environmental. what we gain, you know, relatively small, and you've got to keep in mind our stockholders are one of our stakeholders. we also take care of our people. we take care of the communities that we are in. the people saying all of those are probably not stockholders. >> what do you make of what's going on in washington right now and its impact on your business? i mean, do you fear that if we do go over the sequestration cliff with all the spending cuts that are in the offing at that point, that we could go to recession, and what would that do to your business? >> we just came out of a recession. our company was formed in the great depression, so for the next 80 years we developed, we did well and then comes a great recession, and the great recession hit us like a tsunami, but we had to adjust. and what i'm saying is whatever they are going to do, they have to adjust. don't have an option. which don't want to go out of business.
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we'll do whatever it takes, which, unfortunately, it could mean less people. it could mean that. >> do you support the president's notion that fewer spending cuts are important, more revenue is important to solve the problem in washington? >> you know, i tell you this. i run a business. in what we do is we say we've got to increase our sales, our revenues. sometimes we take a price increase, but if you're only dependant on a price increase, we'd be out of business. but, on the other hand, you've got to control the costs. the costs have gone out of proportion. entitlements at all levels, not just entitlements that are given to the people, entitlements that are given to businesses. many industries are benefiting from this. we don't. i think we must contain these costs of entitlements whether it is to people or whether it is to businesses. >> how does it make you feel when you see the last bill and there were wind credits, when you don't get a furniture credit? you don't get a factory credit, do you, but the wind industry
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gets something, why? >> i think we've got to lock at all the entitlements. the reason they get is there's lobbying going on. if you're a great lobbyist you get it. i think you've got to look at all of those things because our government is still under such tremendous pressure of lobbying. we don't get anything. we actually reallyuldho not be manufacturing in the united states. many other countries that it's easier to do but i say we will do it here because we've made a long-term commitment. without any entitlements, without any concessions, we pay the highest tax rate most probably in the developed world, so i say our government and our business leaders, not just the government, they have to think long term. we have to invest in our people. we have to invest in manufacturing, and we are an integrated company. one of the reasons we manufacture is also the fact that we're able to take it to the consumer. if we didn't do that, maybe we'd not be able to manufacture as much as we do in the united states. >> thanks for joining us. >> always a pleasure seeing both of you. >> the ceo of ethan allen joining us today.
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>> heading towards the close. we've got what, 20 minutes left. the dow is near the highs of the session, and the s&p is on track to close at a five-year high. we need to stay above 1465, and we're two points above that right now. >> less than 20 minutes to go. the s&p kicking off the new year with a nearly 3% gain. top money men say investors shouldn't get used to these kinds of gains. what does he see next? you'll want to hear this. >> also, could congress solve most of the headaches but running the government the way you and i run our households? that debate coming up. >> you live deep in debt, bill? >> horrible, horrible. ly customt for your trading process -- from thought to trade, on every screen. and all in real time. which makes it just like having your own trading floor, right at your fingertips. [ rodger ] at scottrade, seven dollar trades are just the start. try our easy-to-use scottrader streaming quotes.
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and it's bringing the future forward. the markets are looking to close out the first week of the year, albeit a short one in the green, but will the upcoming fight on the debt ceiling slow things as we go forward? >> joining us charlie smith the cio of ft. hood capital and our very own endearing bob pisani. >> loquacious. >> so many words came to mind. charlie, what to make of this week, a good week, biggest one-day point gain for the dow to start a new year and now the s&p is flirting with five-year highs. >> well, we got at least partway through the cliff issues.
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a whole bunch more coming in march but we got through, that and it's all about the earnings now once we start the earnings season here in ten days or so, so i think we're going to see sort of a middling earnings season, not a real good one, but it's partly about how housing holds up as well. if housing slows down and the fed doesn't get busy in creating more money, we could see a weak year. you know, the fed's balance sheet -- >> does the last 24 hours make you nervous then considering what we saw in the minutes? >> if you look at the fed's balance sheet, the federal's balance sheet hasn't grown in over a year, the same size as it was a year ago so they have been able to get a lot of mileage out of all talk and no action. people will start to say bernanke is all hat and no cattle. i think the issue is if we do see the beginnings of a slowdown, say house prices begin to taper back. we see a weak consumer here in the first quarter, first-quarter numbers are weak, we could see the fed have to really get busy
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again. >> bob, how significant for traders is this new five-year high for the s&p? >> well, i think it's important. look, this week was a lot about money -- new money being allocated into stocks and out of bonds, a little bit about the fiscal cliff partially being resolved. i think that's now going to go away, the new money coming in, and everybody who is worried about the debt ceiling and sequestration, those are february issues. can you see that because the vix has collapsed this week. the vix has told you they are not worried about that right now. he's right. it's about the earnings situation. let me tell you what's going to happen fast. i'm hearing the earnings for the banks will be very good for the fourth quarter, and they needed to be good because they were a t of the reason why people were expecting fourth-quarter earings to be better. >> they have done well. >> the question is how much will that help them move up given the rally that they had? retailers though, seven retailers warned this week. i think that's a little bit of an early warning signal. >> i was talking about the
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financials and how well they have done and what their earnings expectations are. we had ralph acampora on earlier saying back up the truck when it comes to financials. how do you feel about that, charlie? >> i think the revenue growth will be very tough for the financials. obviously the mortgage refinancing sector has been helping drive revenue the last six months of 2012, but i think margins have really been difficult. we've seen a lagged effect in asset pricing that's fallen. the yields on loans have been falling now, so i think the margins are going to be really tough for the bank. >> the buyers of these stocks are wrong, or you should sell if you're into them? you've got a rally out of them, get out now? >> i think the buyers are pretty much betting that we'll see continued layoffs at the banks and that the margins are going to be helped by continued cost-cutting. i think if you're a buyer of bank stocks right now, you have to believe that the number of people employed at banks at the end of 2013 is going to be much lower. >> cost-cutting with you also loan growth and steepening of the yield curve. now, i'm not saying any of this
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is happening dramatically, but so far it's getting a little steeper. i'm not trying to argue the bond rally is necessarily over, but things are moving in the direction more favorably for bank profits right now. >> that has begun, you know. obviously the proof is in the pudding. we've got the 30-year back at levels that we saw back in the spring. >> i'm not a believer that the spreads are going to widen out to where the banks are coining money. >> yeah. we're far from those kinds of spreads these days, yeah. charlie, thanks. good to see you. >> considering what they have seen, they will take anything they can get. >> right. the price-to-book ratio, the big banks, still below one, okay, and they got as low as 0.6, so they are going up. there's a long room -- a lot of room for these stocks to move up. >> yeah. >> all right. bob pisani. thank you, bob. >> 13 minutes before the closing bell, and the dow jones industrial average right now is higher by 63, almost 64 points. we're at highs of the session
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basically. >> is that what that said? >> that says 38 points. >> oh, my gosh, i'm looking at the transports. thank goodness you correct that had. >> near all-time highs, as ralph acampora pointed out and the s&p near five-year highs. also ahead, forget about printing money. how about minting a $1 trillion coin, a single one, to give us some distance from the debt ceiling? not a fantasy. could actually happen later on the "closing bell." [ rosa ] i'm rosa and i quit smoking with chantix. when the doctor told me that i could smoke for the first week... i'm like...yeah, ok... little did i know that one week later i wasn't smoking. [ male announcer ] along with support, chantix is proven to help people quit smoking. it reduces the urge to smoke. some people had changes in behavior, thinking or mood, hostility, agitation, depressed mood and suicidal thoughts or actions while taking or after stopping chantix. if you notice any of these stop taking chantix and call your doctor right away. tell your doctor about any history of depression or other mental health problems, which could get worse while taking chantix. don't take chantix if you've had a serious allergic
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hope you were with us earlier this hour. erskine bowles warning republicans that using the debt ceiling as leverage with the president during negotiations could backfire. listen to what he said. >> i hope to high heavens that these guys don't mess around with the full faith and credit of the u.s. government, you know. using the debt ceiling i think is the wrong place to craw the line in the sand. i think speaker gingrich is right, that if they do draw the line in the sand there, they will end up at the end of the day just folding. >> i don't know that there's going to be a choice. i mean -- >> well, i don't know where else you get leverage. >> he was saying the sequester, the fight about the spending cuts that were delayed by two
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months. draw the line in the sand there, but it coincides almost completely with the debt ceiling. it's going to all be wrapped up into one. >> no coincidence why they set the deadline that they did to delay the sequestration by amount of time. it takes us to the debt ceiling which is where the republicans want to go so that they can use that as leverage. what other leverage is anybody going to have to try to get a spending cut done? >> i wish he had been more specific to say, we asked him repeatedly, if you don't get enough cuts from the president should you take the sequester instead? he didn't really give us a good answer, right? >> he thought rational minds should prevail and they should have a thoughtful conversation about what cuts should actually happen. he's right, but it hasn't happened. >> he's absolutely right. >> it never happens. >> so many rational thinking people that come here and say the very same thing, but we don't make the laws. >> and we don't elect them? >> we did elect them. >> i know. >> as a whole. >> it's just proof that congress
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has very different incentives than everybody else. >> i tweeted a little while ago, yes, oh, dear god, i'm tweeting again, @billgriffith, by the way, erskine bowles for president, don't you think, the next term. >> and he's a democrat. >> of course. >> what are we doing now? >> up next, we're coming right back with the closing countdown. >> good one, too, coming up here. google is kicking off the new year with a 4% gain. is this the right stock to go for if you are searching for gains in 2013. that's later on the "closing bell."
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from td ameritrade. inside four minutes before the close. this is the index we're all watching right now as the s&p gets ready. it looks like it's going to close at a five-year high going back to early 2007, so we're back to levels we haven't seen since the whole financial crisis. keep an eye on 1466 and change. we're above that right now with a gain of half a percent right now. otherwise pretty good week. the dow for the week, up about 3.8%, almost a 4% gabe to
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13,439, and that pushed yields in the treasuries, as they bought stocks, they sold treasuri treasuries, the yield up 12% on the ten-year yield. not since last spring have we seen these kinds of yields, up 1.9% on the ten-year. gold, get this, its worst week, its worst week in a couple of years. this is the sixth straight week that we've seen a decline in the price of gold. down another 1% today. for the week though virtually unchanged here, but we're at 1657. it was the vix. this was the fear indicator, sentiment indicator. traders use this to gauge volatility and market direction, and this is the worst week that we've had for the vix in 26 years, down 39% for the week. ralph acampora is back with us. peter costa, my dear friend on the floor with us. >> yes. >> so glad we brought you together because i know you're a big fan like we all are of ralph. >> ralph taught me everything that i know. >> all say the same thing.
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>> but you disagree with his market profile. ralph is wildly bullish on the market right now. >> have been for quite some time. >> and you're not? >> what i said is if you go back on the videotape, warner wolf, i said any time you get a major dip like last week, it's a time to buy, but i was a little bearish sentiment going into the end of the year. we had already reached what i thought were the peaks. listening to raffle maybe i changed my mind, but i felt that we had a great move last year. i figured we would reach an all-time high at some point last year. probably going to do it next week, and i'm still, you know, a little bearish but not so much. >> are we complacent. when you look at that vix, we this this vix that we didn't used to have, the volatility indicator, down sharply, down 40% just this week. >> yeah. >> are we becoming complacent. >> a couple days ago we were up around 22, 23, and everybody was a little nervous so they backed off. on a very short-term basis you can give me that story, but if you look at the vix long

Closing Bell
CNBC January 4, 2013 3:00pm-4:00pm EST

News/Business. Maria Bartiromo, Bill Griffeth. A guide through the most important hour of the Wall Street trading day. New. (CC) (Stereo)

TOPIC FREQUENCY Us 11, S&p 10, Erskine Bowles 6, U.s. 6, T. Rowe 4, Washington 4, Usaa 3, Ralph Acampora 3, Chantix 3, Ethan Allen 3, America 3, China 3, United States 2, Unitedhealthcare 2, Downton Abbey 2, Lulu 2, Apple 2, Wti 2, Lipper 2, Charlie 2
Network CNBC
Duration 01:00:00
Scanned in San Francisco, CA, USA
Source Comcast Cable
Tuner Virtual Ch. 58 (CNBC)
Video Codec mpeg2video
Audio Cocec ac3
Pixel width 528
Pixel height 480
Sponsor Internet Archive
Audio/Visual sound, color

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on 1/4/2013